<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K(A)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 28, 1996
SITEL CORPORATION
(Exact name of registrant as specified in its charter)
Minnesota 0-26152 47-0684333
(State or jurisdiction of (Commission File (I.R.S. Employer
incorporation or organization) Number) Identification No.)
13215 BIRCH STREET
OMAHA, NEBRASKA 68164
(402) 498-6810
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
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This 8-K consists of 7 pages.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
The registrant hereby amends Item 7 of its Form 8-K filed to report
an event occurring on June 28, 1996 to include the following:
(a) Financial statements of businesses acquired.
The Company hereby incorporates by reference in this Form 8-K
the financial statements of National Action Financial Services, Inc.
contained in pages F-82 through F-94 of the Company's Proxy Statement
filed July 29, 1996 on Schedule 14A.
(b) Pro forma financial information.
UNAUDITED PRO FORMA COMBINED FINANCIAL DATA
The unaudited pro forma combined statement of income (loss) for the years
ended May 31, 1993, 1994 and 1995 and for the nine months ended February
28, 1995 and February 29, 1996 give effect to the Company's acquisition of
National Action Financial Services, Inc. ("NAFS", and such acquisition,
the "NAFS Acquisition"), accounted for as a "pooling of interests", as if
it had occurred on June 1, 1992. The unaudited pro forma combined balance
sheet as of February 29, 1996, gives effect to the NAFS Acquisition as if
it had occurred on February 29, 1996. The historical financial data of the
Company included in the pro forma combined financial data are for and as
of the periods presented. NAFS did not have material operations prior to
June 1, 1994. The historical financial data of NAFS included in the pro
forma combined financial data presented herein for the year ended May 31,
1995 are from NAFS's unaudited statements of earnings (loss) and retained
earnings for the twelve months ended June 30, 1995. The historical financial
data of NAFS included in the pro forma combined financial data presented
herein as of February 29, 1996 and for the nine months then ended are from
NAFS's separate unaudited financial statements as of March 31, 1996 and the
nine months then ended.
On February 9, 1996, the Company acquired substantially all of the net
assets of C.T.C. Canadian Telephone Corporation and 2965496 Canada, Inc.
(collectively, "CTC"), consequently, the pro forma combined statements of
operations include the historical financial data of CTC for the year ended
April 30, 1995 and the nine months ended January 31, 1996.
The pro forma combined statements of operations are not necessarily
indicative of the results of operations that would have been achieved had
the transactions described therein been consummated on the above dates or
that may be achieved in the future and should be read in conjunction with
the separate financial statements of the Company, NAFS and CTC, respectively,
including the notes thereto, contained in pages F-11 through F-26, F-82
through F-94, and F-95 through F-109, respectively, of the Company's Proxy
Statement filed July 29, 1996 on Schedule 14A.
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SITEL CORPORATION
PRO FORMA COMBINED BALANCE SHEET
FEBRUARY 29, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
SITEL(a) NAFS(b) ADJUSTMENTS COMBINED
----------- ----------- ---------------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents....................................... $ 6,325 $ 906 $ 7,231
Trade accounts receivable, net.................................. 23,036 1,810 24,846
Marketable securities........................................... 47,175 (500)(c) 46,675
Prepaid expenses................................................ 735 105 840
Other........................................................... 1,597 -- 1,597
Income taxes receivable......................................... 629 -- 629
Deferred income taxes........................................... 476 -- 476
----------- ----------- -------- -----------
Total current assets........................................ 79,973 2,821 (500) 82,294
----------- ----------- -------- -----------
Property and equipment, net....................................... 14,791 1,412 16,203
Deposits and other assets......................................... 558 86 644
Loans receivable from related parties............................. 340 -- 340
Goodwill, net..................................................... 5,958 44 6,002
Deferred income taxes............................................. 13,467 -- 13,467
----------- ----------- -------- -----------
Total assets................................................ $ 115,087 $ 4,363 $ (500) $ 118,950
----------- ----------- -------- -----------
----------- ----------- -------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable -- bank............................................ $ 700 $ 353 $ 1,053
Current portion of long-term obligations........................ 20 77 97
Trade accounts payable.......................................... 5,163 503 5,666
Accrued wages, salaries and bonuses............................. 6,070 619 6,689
Other accrued expenses.......................................... 737 274 1,011
Customer deposits and other..................................... 429 45 474
----------- ----------- -------- -----------
Total current liabilities................................... 13,119 1,871 -- 14,990
----------- ----------- -------- -----------
Long-term debt obligations, net................................... 129 1,025 1,154
Other liabilities................................................. 726 29 755
Redeemable preference shares...................................... -- -- --
Stockholders' equity:
Preferred stock................................................. -- 285 (285)(d) --
Common stock.................................................... 9 285 (284)(d) 10
Paid-in capital................................................. 106,511 -- 569 (d) 107,080
Currency exchange adjustment.................................... 20 -- 20
Retained earnings (deficit)..................................... (5,427) 868 (500)(c) (5,059)
----------- ----------- -------- -----------
Total stockholders' equity.................................. 101,113 1,438 (500) 102,051
----------- ----------- -------- -----------
Total liabilities and stockholders' equity.................. $ 115,087 $ 4,363 $ (500) $ 118,950
----------- ----------- -------- -----------
----------- ----------- -------- -----------
</TABLE>
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(a) The combined balance sheet of CTC has not been presented separately on this
statement as it was included in the consolidated historical statements of
SITEL as of February 29, 1996.
(b) The balance sheet of NAFS is as of March 31, 1996.
(c) Estimated transaction costs related to the NAFS Acquisition are estimated at
$500,000.
(d) The unaudited proforma combined financial statements reflect the application
of the pooling of interests method of accounting for the NAFS acquisition.
Under this method of accounting, it is necessary to reclassify common stock
to paid-in capital to reflect the par value of SITEL's common stock which is
lower than the par value of NAFS.
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SITEL CORPORATION AND
NATIONAL ACTION FINANCIAL SERVICES, INC.
COMBINED STATEMENT OF OPERATIONS (a)
(UNAUDITED)
<TABLE>
<CAPTION>
FISCAL YEARS ENDED NINE MONTHS ENDED
-------------------------------------- ------------------------------
MAY 31, MAY 31, MAY 31, FEBRUARY 28, FEBRUARY 29,
1993 1994 1995 (b) 1995 (b) 1996 (b)
--------- --------- ---------------- ---------------- ------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
Revenues................................ $ 55,498 $ 68,855 $ 105,145 $ 73,879 $ 107,498
Operating expenses:
Cost of services...................... 31,553 37,052 56,842 40,599 57,415
Divisional selling, general and
administrative expenses.............. 17,847 23,810 34,104 23,837 34,058
Corporate general and administrative
expenses............................. 3,664 5,567 6,474 4,844 5,618
Special compensation expense.......... -- -- 34,585 (c) 34,585 (c) --
--------- --------- ---------------- ---------------- ------------
Operating income (loss)............. 2,434 2,426 (26,860)(d) (29,986)(d) 10,407
Interest expense, net................... (757) (538) (750) (530) 398
Other income (expense).................. 106 1,371 399 292 60
--------- --------- ---------------- ---------------- ------------
Income (loss) before income taxes... 1,783 3,259 (27,211) (30,224) 10,865
Income tax expense (benefit)............ 575 391 (9,454) (10,484) 3,937
--------- --------- ---------------- ---------------- ------------
Net income (loss)................... 1,208 2,868 (17,757)(d) (19,740)(d) 6,928
--------- --------- ---------------- ---------------- ------------
--------- --------- ---------------- ---------------- ------------
Earnings (loss) per common and common
equivalent share....................... $ 0.07 $ 0.15 $ (0.96)(d) $ (1.06)(d) $ 0.31
--------- --------- ---------------- ---------------- ------------
--------- --------- ---------------- ---------------- ------------
Weighted average common and common
equivalent shares outstanding (e) ..... 17,964 18,571 18,571 18,571 22,475
--------- --------- ---------------- ---------------- ------------
--------- --------- ---------------- ---------------- ------------
</TABLE>
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(a) The results of operations reflect the application of the pooling of
interests method of accounting for the NAFS acquisition.
(b) The results of operations of NAFS that have been included in the combined
statements for the year ended May 31, 1995, and the nine months ended
February 28, 1995 and February 29, 1996 are for the year ended June 30,
1995 and the nine months ended March 31, 1995 and March 31, 1996,
respectively. NAFS did not have material operations prior to June 1, 1994.
(c) Represents a non-recurring, non-cash compensation expense of $34.6 million
incurred by SITEL in 1995 resulting from the grant of stock options with an
exercise price of $0.01 per share to 265 employees of the Company to
replace stock appreciation rights previously granted under the Company's
Employee Equity Benefit Plan and previously granted stock options.
(d) Excluding the special compensation expense and a one-time forgiveness of
$528,000 owed by two stockholders, operating income, net income and net
income per share would have been $8.3 million, $5.4 million and $0.29 for
the fiscal year ended May 31, 1995 and $5.1 million, $3.4 million, and
$0.18 for the nine months ended February 28, 1995, respectively.
(e) Consists of SITEL's historical weighted average common and common
equivalent shares outstanding and the SITEL shares issued for the NAFS
Acquisition.
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SITEL CORPORATION
PRO FORMA COMBINED STATEMENTS OF OPERATIONS
YEAR ENDED MAY 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
SITEL CTC(a) NAFS(b,c) ADJUSTMENTS COMBINED
----------- --------- ----------- -------------- ----------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
Revenues........................................... $ 101,378 $ 6,342 $ 3,767 $ $ 111,487
Operating expenses:
Cost of services................................. 55,054 3,788 1,788 60,630
Divisional selling, general and administrative
expenses........................................ 32,979 1,173 1,126 35,278
Corporate general and administrative expenses.... 6,160 758 314 511 (d) 7,743
Special compensation expense..................... 34,585 (e) -- -- 34,585 (e)
----------- --------- ----------- ------- ----------------
Operating income................................... (27,400)(f) 623 539 (511) (26,749)(f)
Other income (expenses)............................ (303) 5 (47) (209)(g) (554)
----------- --------- ----------- ------- ----------------
Income before income taxes......................... (27,703) 628 492 (720) (27,303)
Income tax expense................................. (9,603) 190 149 (194)(g) (9,458)
----------- --------- ----------- ------- ----------------
Net income......................................... $ (18,100)(f) $ 438 $ 343 $ (526) $ (17,845)(f)
----------- --------- ----------- ------- ----------------
----------- --------- ----------- ------- ----------------
Earnings (loss) per common and common
equivalent share.................................. $ (1.05)(f) $ (0.96)(f)
----------- ----------------
----------- ----------------
Weighted average common and common equivalent
shares outstanding................................ 17,207 18,571 (h)
----------- ----------------
----------- ----------------
</TABLE>
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(a) The combined results of operations of CTC are for the year ended April 30,
1995 and have been translated from Canadian dollars to US dollars at the
average exchange rate for the period.
(b) The results of operations of NAFS are for the twelve months ended June 30,
1995.
(c) The results of operations reflect the application of the pooling of
interests method of accounting for the NAFS acquisition.
(d) Represents the amortization of goodwill resulting from the CTC acquisition,
which will be amortized on a straight-line basis over a period of 25 years,
and an adjustment to reduce expenses for fees paid to a management employee
of CTC which will not be paid after the acquisition.
(e) Represents a non-recurring, non-cash compensation expense of $34.6 million
incurred by SITEL in 1995 resulting from the grant of stock options with an
exercise price of $0.01 per share to 265 employees of the Company to replace
stock appreciation rights previously granted under the Company's Employee
Equity Benefit Plan and previously granted stock options.
(f) Excluding the special compensation expense and a one-time forgiveness of
$528,000 owed by two stockholders, operating income, net income and net
income per share would have been $7.6 million, $5.2 million and $0.30 for
SITEL and $8.3 million, $5.3 million and $0.28 for the Pro Forma
Combined entity, respectively.
(g) Represents an assumed increase in interest expense and the related tax
effect which would have occurred had the payment of the CTC purchase
price occurred as of the beginning of the period.
(h) Consists of SITEL's historical weighted average common and common
equivalent share outstanding and the SITEL shares issued for the
NAFS Acquisition.
5
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SITEL CORPORATION
PRO FORMA COMBINED STATEMENTS OF OPERATIONS
NINE MONTHS ENDED FEBRUARY 29, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
SITEL CTC(a) NAFS(b,c) ADJUSTMENTS COMBINED
--------- --------- ----------- -------------- -----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
Revenues................................................... $ 98,861 $ 4,054 $ 8,638 $ (433)(d) $ 111,120
Operating expenses:
Cost of services......................................... 52,951 2,880 4,464 (215)(d) 60,080
Divisional selling, general and administrative
expenses................................................ 31,485 1,279 2,574 (227)(d) 35,111
Corporate general and administrative expenses............ 5,170 301 448 125 (e) 6,044
--------- --------- ----------- ------- -----------
Operating income........................................... 9,255 (406) 1,152 (116) 9,885
Other income (expense)..................................... 533 32 (76) (157)(f) 332
--------- --------- ----------- ------- -----------
Income before income taxes................................. 9,788 (374) 1,076 (273) 10,217
Income tax expense......................................... 3,466 (134) 471 (55)(f) 3,748
--------- --------- ----------- ------- -----------
Net income................................................. $ 6,322 $ (240) $ 605 $ (218) $ 6,469
--------- --------- ----------- ------- -----------
--------- --------- ----------- ------- -----------
Earnings (loss) per common and common equivalent share..... $ 0.30 $ 0.29
--------- -----------
--------- -----------
Weighted average common and common equivalent
shares outstanding........................................ 21,111 22,475(g)
--------- -----------
--------- -----------
</TABLE>
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(a) The combined results of operations of CTC are for the nine months ended
January 31, 1996 and have been translated from Canadian dollars to US
dollars at the average exchange rate for the period.
(b) The results of operations of NAFS are for the nine months ended March 31,
1996.
(c) The results of operations reflect the application of the pooling of
interests method of accounting for the NAFS acquisition.
(d) SITEL's consolidated results of operations for the nine months ended
February 29, 1996 include one month of CTC's operations. Since CTC's results
of operations presented are for the nine months ended January 31, 1996, the
results of CTC operations for the month of February 1996 are being removed
to avoid the inclusion of 10 months of activity.
(e) Represents the amortization of goodwill resulting from the CTC acquisition,
which will be amortized on a straight-line basis over a period of 25 years.
(f) Represents an assumed reduction of interest income and the related tax
effect which would have occurred had the payment of the CTC purchase price
occurred as of the beginning of the period.
(g) Consists of SITEL's historical weighted average common and common
equivalent shares outstanding and the SITEL shares issued for the NAFS
Acquisition.
6
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: August 30, 1996 SITEL Corporation
By: /s/ Barry S. Major
----------------------------
Barry S. Major, Executive
Vice President and Chief
Financial Officer
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